Business leaders in Scotland have shared their views on what should happen in today's UK Budget as Chancellor Jeremy Hunt prepares to deliver what he's set to call a 'back to work' Budget.
Mr Hunt is set to make announcements on energy bill support, benefits reform and pensions allowances when he addresses the House of Commons today - though he is set to resist calls from Conservative backbenchers to go further on tax cuts.
He is also likely to make announcements on childcare as part of a package of measures aimed at helping people back into the workplace. He's also set to announce measures to boost science and innovation and to support Edinburgh's Festivals.
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The Chancellor is expected to say: “Today, we deliver the next part of our plan: a Budget for growth. Not just growth from emerging out of a downturn.
“But long term, sustainable, healthy growth that pays for our NHS and schools, finds good jobs for young people, provides a safety net for older people… all whilst making our country one of the most prosperous in the world.”
Here's what some Scottish experts have to say:
Grant Thornton - businesses want focus on low carbon strategies, digital tech and levelling up
Grant Thornton’s latest Business Outlook Tracker shows the policy areas that Scottish mid-market business leaders hope to see prioritised by the Chancellor.
The joint top priorities were low carbon business strategies and incentives for capital investment were the joint top priorities for the country (both 34%).
Other high priorities included measures to level up the economy across the UK and measures to support digital transformation.
Businesses said they were grappling with high prices, the loss of energy support and the upcoming rise in corporation tax. But 68% of those polled said they were confident the UK government would offer help to Scottish businesses through the Budget.
Stuart Preston, Partner at Grant Thornton UK LLP in Scotland, said: “It's really encouraging that Scottish businesses see the opportunities in Net Zero and are prioritising green growth, which certainly reflects the push for environmentally friendly investment here.
“Further commitment from the Government for the Levelling Up agenda ranked highly too - too many places in need didn't succeed last time, while an intent to provide targeted and specific grants to support the low-carbon revolution in our region would be a worthy investment in the future.
“Adoption of digital technology is also key for Scotland – which has a burgeoning tech sector. The pandemic accelerated a fundamental shift in how we work, underpinned by a greater reliance on technology and the need to ‘go digital’. In many cases, digital transformation led to improved efficiency, new routes to market and greater collaboration.
“The mid-market now has the potential to build on, and accelerate, its digital journey and we need to ensure the momentum around this agenda does not slow.”
KPMG Scotland expects ‘fiscally conservative’ speech
Vishal Chopra, head of tax for Scotland at KPMG UK, said: “The statement is expected to be a fiscally conservative one with no significant personal tax cuts which are likely to be saved for closer to the general election. But there could be some significant reveals for business.
“There has been speculation that the Chancellor might follow his predecessor’s path and u-turn on the planned increase in the headline rate of corporation tax to 25% from 1 April 2023. This is unlikely as it would leave a big hole in public finances to fill.
“The UK is under pressure to set out how it will attract green investment and use the tax system to help the transition to net zero. This could mean an extension to the super-deduction and the R&D regime focussed on green investment. The challenge will be whether it will be a big enough deal to disrupt policies being rolled out in the US and EU.”
Mr Chopra said he wanted to hear more detail of what investment zones could mean for Scotland.
And he is also waiting to see what Mr Hunt will say about getting people back to work.
He said: “The government is particularly concerned about the over 50s choosing to take early retirement. They could seek to make the option of staying in work more attractive. Focus could also be given to working parents and retraining incentives.
“Fuel duty is expected to be frozen despite the fact this sends the wrong message on climate change. Politically it is difficult to see how the government could increase the duty that has been frozen since 2011 and was further cut by 5p in the 2022 Spring Statement for one year.
“To sum up, no significant tax cuts, no tax rises but possibly a big unveil on green and levelling up, in part to compensate for the removal of the super deduction and the increase in the headline rate of corporation tax.”
Scottish Widows - Chancellor has chance to make pension changes
The Chancellor is likely to allow workers to put more money into their pension pot before being taxed by lifting the lifetime pension allowance.
Pete Glancy, head of policy at Scottish Widows, said: "By increasing the Lifetime Allowance to £1.8m and the Annual Allowance to £60k, this Budget has begun to address some key issues, but there is a clear opportunity to make practical changes with short-, medium- and long-term benefits.
“The previous allowances on pension savings, set at £1,073,100 and £40k respectively, were designed for a bygone era of low inflation and steady wage growth. Recently, the Lifetime Allowance penalised savers who exceeded the threshold with a punitive tax penalty of 55%, even if their pots simply keep pace with rising prices. This has driven senior professionals out of the workforce, draining the economy of much-needed skills, experience, and productivity. The Annual Allowance, meanwhile, has prevented senior professionals from being able to save more than £40k into their pensions each year .
“Increasing these allowances will improve the fortunes of both working people and the public purse. Bigger pension pots not only mean more money for people to spend in retirement, they also mean higher tax receipts in the long run as the extra retirement income is also subject to taxation. This significant increase to the allowances is a welcome improvement on previous Budgets, and will help to get the country’s economy back on track.
“I hope that this is the first of a series of annual reviews into the allowances, to ensure they keep pace with inflation so savers are not unduly punished.”
